The 2007 financial crisis had a huge impact on the US housing industry, posing serious difficulties for major participants like Fannie Mae. Using data-driven visualisations, we compare the financial environment of Fannie Mae between 2007 and 2019 in this investigation. During the crisis peak, default rates surged, hitting their peak around 2010. This was driven by various factors: subprime lending by banks, the housing bubble burst causing property overvaluation and subsequent price drops, widespread sale of risky financial products like mortgage-backed securities, and Fannie Mae’s heavy exposure to US residential mortgages coupled with high leverage.We want to comprehend the elements that led to Fannie Mae’s bankruptcy in 2007 and evaluate if subsequent actions resulted in a more solid financial situation in 2019 by looking at visualisations for each year.

Figure1 1:The line chart captures a noteworthy drift in default rates from 2000 to past 2020. It appears there is a continuous increment driving up to a top fair over 7.5% around 2010, recommending a period of money related push. Taking after this top, there’s a sharp decay, and from around 2012 onwards, the default rates stabilize at a lower level, showing a recuperation and a period of relative money related soundness. This chart reflects the instability of default rates over two decades and the affect of financial variables on monetary wellbeing. 

Figure2 2:The graph comparing borrower credit scores between 2007 and 2019 reveals a notable shift in creditworthiness. In 2007, credit scores were widely distributed with a peak at 650, reflecting a broader range of credit qualities. By 2019, the distribution narrows and shifts rightward, peaking at 700, indicating an overall improvement in credit scores. Additionally, the proportion of borrowers within each credit purpose category has evolved, with a significant decrease in category ‘C-Cash-Out Refinance’, suggesting changes in borrowing behavior or lending practices over the 12-year span.

Figure3 3:In 2007, there was a significant default rate among borrowers with low credit scores, as shown by the blue segment at the base of the ‘Low’ category bar. By 2019, the default rate had dramatically decreased across all categories, with almost no defaults recorded, indicating a substantial improvement in financial responsibility and loan repayment practices. This suggests that over the 12-year period, either the creditworthiness of borrowers improved, lending criteria became more stringent, or a combination of both factors contributed to a healthier loan repayment environment.

Figure4 4:In 2007, the average amortization periods for Principal (P), Second (S), and Investor (I) properties were clustered around 200 months, indicating relatively shorter loan terms. By 2019, these periods had uniformly increased to nearly 300 months for all categories, reflecting a substantial extension in the time borrowers expect to pay off their loans. This change suggests a shift in the mortgage industry towards longer-term financing options over the 12-year period.

Figure5 5:In 2007, the DTI ratios were concentrated around a lower median of 20, with channel B having the highest frequency of borrowers. By 2019, the distribution has moved towards higher DTI ratios, peaking at around 40, especially in channels B and C, indicating that borrowers are taking on more debt relative to their income. Channel R maintains a consistent pattern across both years. This trend suggests an increase in financial leverage among borrowers over the 12-year period.

Figure6 6: Figure7 7:

In 2007, the map showed a higher concentration of defaulters in states like California and Texas, with darker shades indicating a larger number of defaults. By 2019, the intensity of the defaulters’ distribution appears to have lessened, with most states showing lighter shades, suggesting a decrease in the number of defaults. This could reflect an improvement in economic conditions, more stringent lending practices, or a combination of both, leading to a healthier financial environment with fewer loan defaults. The shift from darker to lighter shades across the majority of states indicates a positive trend in loan repayments over the twelve-year period.

The period from 2007 to 2019 marks Fannie Mae’s recuperation from a far reaching showcase emergency to a steady money related substance. At first characterized by tall default rates, the consequent a long time saw made strides credit scores and a decay in defaults, reflecting the affect of administrative changes and vital government intercessions. This story illustrates the monetary system’s versatility and the basic requirement for dependable loaning and hazard administration to preserve contract advertise solidness. 

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Figure Appendix

Visualization 1:Line Chart indicating the spike in default rates in 2007

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Line Chart indicating the spike in default rates in 2007

Figure 1: Line Chart indicating the spike in default rates in 2007


Visualization 2: Borrower Creditworthiness

Density Plot of credit score by Purpose

Figure 2: Density Plot of credit score by Purpose

Visualization 3: Proportion of Defaults by Credit Score Characteristic

Stacked bar graph of borrowers credit score with proportion of default rates.

Figure 3: Stacked bar graph of borrowers credit score with proportion of default rates.

Visualization 4: Average Amortization Period by Occupancy Status

Bar graph of average amortization period by occupancy status

Figure 4: Bar graph of average amortization period by occupancy status

Visualization 5: Distribution of Borrower DTI by Purpose

Stacked histogram of DTI by purpose

Figure 5: Stacked histogram of DTI by purpose

Visualization 6: Recovery and Resilience

Figure 6: Statewise total defaulters in 2007

Figure 7: Statewise total defaulters in 2019